When a good is characterised by non-excludability, it is theoretically possible for the government to:
A) increase the wellbeing of residents by raising taxes to provide the good
B) eliminate the free-rider problem
C) reach the efficient outcome in spite of private market failure to do s
D) do all of the above

Question

Quizplus · Accepted Answer

When a good is non-excludable, everyone can benefit from its consumption, even those who did not pay for it. This creates a free-rider problem, where people have the incentive to consume the good without paying for it.

To resolve this issue, the government can increase the wellbeing of residents by raising taxes to provide the good, eliminating the free-rider problem, and ensuring efficient allocation of resources. Therefore, option D, "do all of the above," is the best choice.

When a Good Is Characterised by Non-Excludability, It Is Theoretically